The Enforcement Directorate (ED) is tracking allegations of “proxy holdings” by the ousted IPL commissioner Lalit Modi through a maze of transactions linking tax havens and mysterious stakeholders in at least four teams in the popular, but controversial, cricket league.
Government sources familiar with the ED probe, which tracks overseas transactions and money laundering deals, told HT that the agency is going through details of these teams, including Jaipur IPL Cricket Pvt Ltd (JIPL), which owns Rajasthan Royals, amid allegations that it had flouted rules in incorporation, auction and foreign equity infusion.
In 2011, the ED had first flagged such concerns. It had told the parliamentary standing committee on finance that “investigations into the alleged proxy holdings of Lalit Modi in some of the franchisees” were in progress.
Nigeria-based Suresh Chellaram, who is Modi’s brother-in-law, Blue Water Estate Ltd owned by media-baron Rupert Murdoch’s son Lachlan Murdoch, and Emerging Media led by UK-based Manoj Badale had bought the Jaipur IPL franchise for $ 67 million in the 2008 team auctions. In 2009, Raj Kundra and his Bollywood actor wife Shilpa Shetty were inducted as co-owners. The duo exited from the team earlier this year. Prior to Kundra’s exit, Chellaram and Emerging Media used to own 44.1% and 42.4% respectively in the team, with the remaining two partners holding the rest.
“We have made our ownership pattern clear to all including the BCCI. The charges against us are completely untrue,” said a Rajasthan Royals official. The ED is also scouring through the details in which the Foreign Investment Promotion Board had rejected a decision on JIPL’s proposal to induct $5.82 million (Rs 26.7 crore then) into the company in 2010. FIPB had rejected the proposal on the recommendations of the revenue department, which had questioned the consortium’s source of funding.
Sources said that ED’s internal findings also show that JIPL was incorporated long after the auction of team ownership.
“The ED suspects that there could be cross holdings in a set of franchise teams in which the investments came from aboard, from known tax havens, and were layered. ED is verifying if a few, including Lalit Modi, have proxy holdings on some of these firms,” said an official source.